The merchant service charge, or MSC, is the fee deducted by the acquirer every time a UK business accepts a card payment. It bundles interchange, scheme fees and the acquirer’s margin into a single percentage taken off each transaction. For the full primary-source benchmark dataset behind the figures on this page, see the UK Card Processing Fee Benchmarks page.
UK card-processing costs at a glance
Sources: BRC Payments Survey 2025 (2024 data); PSR MR22/1.10 Final Report, March 2025; Visa and Mastercard UK Interchange Schedules 2024/25; PSR MR22/2.8 cross-border interchange consultation; Nilson Report acquirer rankings 2025. All figures verified against primary sources June 2026.
How a card payment becomes a merchant service charge
Every card transaction flows through the same chain. Different parties take a slice along the way, and what reaches the business is the sale value minus the MSC.
Why card-processing fees vary between businesses
Two businesses on the same advertised plan can pay very different effective rates. Five things move the price most:
Business cards
Commercial and corporate cards sit outside the consumer interchange cap, so accepting them can cost meaningfully more than consumer debit.
Online payments
Card-not-present transactions carry higher fraud and chargeback risk, and acquirers usually price them above in-person rates.
Foreign-issued cards
UK-EEA cross-border card-not-present consumer interchange rose to 1.15% debit and 1.50% credit after Brexit. Other non-UK cards can be higher again.
Blended pricing
One headline percentage hides the underlying mix. Expensive card types are absorbed inside the average, so changes in mix change the effective rate without changing the plan.
Scheme-fee pass-through
Visa and Mastercard scheme fees are not capped like interchange. When acquirers itemise them separately, fee rises show up on the statement even if the headline rate is unchanged.
What is included in MSC?
On most acquiring contracts the MSC appears as a single blended percentage. Underneath, it has three parts. American Express runs a separate three-party model with its own single merchant rate, so it sits outside this stack.
| Component | Paid to | What it means | Regulated? |
|---|---|---|---|
| Interchange | Card-issuing bank | The fee the issuer takes for putting the card in the customer’s hand and standing behind the transaction | Yes for UK consumer cards (IFR caps) |
| Scheme fees | Visa or Mastercard | Network access, processing, authorisation and related services from the card scheme | No (PSR transparency remedy now landing) |
| Acquirer margin | Card acquirer | The acquirer’s own profit and overhead on top of the costs above | No |
Source: UK Interchange Fee Regulation (retained EU law); PSR MR22/1.10 Final Report, March 2025. Checked June 2026.
Interchange caps: what is regulated and what is not
Since 2015, the UK Interchange Fee Regulation has capped interchange on consumer cards. Commercial cards, foreign-issued cards, American Express, and some UK-EEA card-not-present transactions sit outside that cap.
UK consumer cards, domestic transactions
- UK consumer debit: 0.20%
- UK consumer credit: 0.30%
Commercial, cross-border and three-party
- Commercial and business cards
- Foreign-issued cards
- American Express proprietary cards
- Some UK-EEA card-not-present transactions
Source: UK Interchange Fee Regulation (retained EU law); Visa UK Interchange Schedule 2024/25; Mastercard UK Interchange Schedule 2024/25; PSR MR22/2.8 cross-border consultation, December 2024.
Published UK provider benchmarks, Q1 2026
Published rates usually apply to a single narrow transaction type, such as domestic in-person consumer-card payments. They are not the same as a merchant’s full effective MSC, which also reflects commercial cards, foreign-issued cards, online channels, refunds and chargebacks.
In-person PAYG published rates, domestic consumer cards
| Provider | Published rate | Notes |
|---|---|---|
| Lopay | 0.79% (weekly) / 0.99% (next-day) | No contract; +1.0% surcharge on Amex, commercial and international cards |
| Revolut Reader | 0.80% + 2p | Requires a Revolut Business account (from £10/month) |
| SumUp | 1.69% PAYG / 0.99% on Payments Plus | Payments Plus is £19/month; flat rate includes Amex |
| Tide | 1.50% + 5p PAYG / 0.89% + 3p | Lower rate on the £17.99/month plan; requires a Tide account |
| Square | 1.75% | +1.5% surcharge on international cards |
| Zettle (PayPal) | 1.75% | Flat rate includes Amex; requires a PayPal Business account |
| Dojo | From £39.99/month (Dojo Fix) | Flat monthly fee covering up to £3,999 volume; popular in hospitality |
Online and contract-based published rates
| Provider | Published rate | Notes |
|---|---|---|
| Stripe | 1.4% + 20p in-person / 1.5% + 20p online | UK cards; +1% cross-border, +2% FX, +3.25% international cards |
| Teya | Custom blended, from ~1.4% | FCA-authorised acquirer; £24.90/month terminal; 30-day rolling or 12-month |
| takepayments | Bespoke, 0.3%–2.5% by turnover | 12-month minimum; acquirer, MMSC and PCI fees apply |
Source: provider rate cards as published Q2 2026; domestic consumer-card mix only. Checked June 2026. Larger merchants on interchange-plus or custom contracts are priced differently. Worldpay, Elavon and Adyen quote on this basis above SME scale.
Indicative effective MSC by merchant size and sector
| Segment or sector | Typical effective MSC | Why |
|---|---|---|
| Micro / SME (PAYG) | 1.39%–1.75% | Blended flat rates; expensive card types absorbed in the average |
| Mid-market (£50k–£300k/mo) | 0.6%–1.0% debit / 1.4%–1.8% credit | Negotiated rates via traditional acquirers |
| Enterprise (>£300k/mo, IC++) | 0.4%–0.8% debit / 0.9%–1.3% credit | Interchange-plus-plus pricing at scale |
| Hospitality | ~1.2%–1.75% | Low average transaction values suit percentage pricing |
| E-commerce | ~1.5%–2.5% | Higher CNP interchange and gateway fees |
| B2B / professional services | ~2.5%–3.25% | Commercial cards dominate the mix and bypass the IFR cap |
Source: PSR market reviews; BRC Payments Survey 2025; FSB card-acceptance survey; provider rate cards Q2 2026. Effective MSC reflects the full card mix, not a single transaction type.
Blended, interchange-plus or custom: which pricing model fits
The right pricing model is mostly a question of volume and contract leverage.
Blended is easy to read but hides the mix. Interchange-plus is more transparent but takes more effort to reconcile. Custom contracts give the largest merchants room to negotiate, but contract terms then matter as much as the headline rate.
Scheme fees vs interchange fees
Both fees come out of the same MSC, but they go to different places and are regulated very differently.
Interchange
Paid to the customer’s card issuer for every transaction. UK domestic consumer debit and credit cards are capped at 0.20% and 0.30% under the UK Interchange Fee Regulation.
Commercial cards and post-Brexit UK-EEA cross-border cards are not capped at the same level.
Scheme fees
Charged by Visa and Mastercard for network access, authorisation and processing. They are not capped under the IFR and are often not itemised clearly on small-business statements.
The PSR’s transparency remedy is now landing: directions issued in December 2025 (CP25/3) require Visa and Mastercard to give acquirers transaction-level fee data and advance notice of new fees, with regulatory financial reporting added in spring 2026 (CP26/1).
- Core scheme and processing fees billed to acquirers rose by more than 25% in real terms between 2017 and 2023.
- That increase cost UK businesses an estimated £250 million a year, with no matching improvement in service quality.
- Acquirers reported receiving billing information from the schemes that was highly complex and incomplete, making reconciliation and negotiation near-impossible.
- Mastercard and Visa together carry 99% of UK debit and credit card payments, so there is little competitive pressure on scheme fees.
UK retailers in the British Retail Consortium spent £1.48 billion on card-processing costs in 2024, the first annual fall after years of rises, down from £1.64 billion in 2023 (itself up from £1.26 billion in 2022). The dip reflects softer transaction volumes under cost-of-living pressure, not lower per-transaction rates. Source: BRC Payments Survey 2025; 2023 figure via PSR MR22/1.10 Final Report, March 2025. BRC-member retailers only; total UK merchant acceptance cost is higher.
What Brexit did to UK-EEA card-not-present interchange
Before the UK left the EU’s single regulatory area at the end of 2020, UK-EEA cross-border card-not-present transactions were capped at the same level as domestic ones. After Brexit, Visa and Mastercard reset consumer interchange on those transactions to roughly five times the previous rate.
| Card type | Before (pre-Brexit cap) | After (current rate) |
|---|---|---|
| UK-EEA consumer debit, card-not-present | 0.20% | 1.15% |
| UK-EEA consumer credit, card-not-present | 0.30% | 1.50% |
Roughly a fivefold increase on both card types. The PSR found these rates were set to an “unduly high level” with no adequate justification, costing UK businesses an estimated £150–£200 million a year. As of June 2026 the rates are unchanged: the PSR declined to impose an interim cap in October 2025, and the High Court confirmed the regulator’s power to cap in January 2026. Source: Visa and Mastercard UK Interchange Schedules; PSR MR22/2.8 cross-border interchange consultation.
What changed in 2025 and what comes next
PSR final report MR22/1.10
Ruled out immediate price-capping of scheme fees. Introduced the Information, Transparency and Complexity (ITC) remedy and a Pricing Governance remedy requiring schemes to justify future fee increases.
Cross-border cap deferred, then upheld in court
The PSR declined an interim cap on UK-EEA CNP interchange (10 October 2025). The High Court then confirmed the PSR’s legal power to cap (15 January 2026). A final decision is expected in late 2026 or early 2027.
ITC remedy goes live; oversight moves to the FCA
Transparency directions (CP25/3, December 2025) and financial reporting (CP26/1, spring 2026) require Visa and Mastercard to surface fee data to acquirers. Card-market oversight is transferring from the PSR to the FCA, with David Geale leading both since May 2025.
Worked example: a café taking £20,000 a month in card payments
How a small shift in the effective rate plays out for a business with steady card turnover:
| Scenario | Effective rate | Monthly card sales | Monthly MSC | Annual MSC |
|---|---|---|---|---|
| Mostly domestic consumer cards | 1.5% | £20,000 | £300 | £3,600 |
| More commercial cards, online and scheme-fee pass-through | 1.9% | £20,000 | £380 | £4,560 |
| Difference | +0.4 pts | £80 | £960 |
Illustrative example. Actual MSC depends on each business’s card mix, channel mix, contract type and the acquirer’s scheme-fee pass-through policy.
Why your actual MSC can be higher than the advertised rate
Advertised rates almost always apply to a specific transaction type, such as domestic in-person consumer-card payments. Your real cost of accepting cards reflects the full mix going through the business. The effective rate climbs when commercial cards, foreign-issued cards, online channels, American Express, refunds, chargebacks or itemised scheme-fee pass-throughs come into the picture. On blended PAYG plans those costs are absorbed inside one headline percentage; on interchange-plus contracts they appear as separate line items but still flow through to the same bottom line.
A second reason real MSC drifts from the headline is that card-processing costs move year-on-year for reasons that have nothing to do with your business. Scheme fees billed to acquirers rose by more than 25% in real terms between 2017 and 2023. UK retailer card-processing costs jumped 30% in a single year between 2022 and 2023. Comparing the same month year-on-year, rather than month-on-month, makes those underlying shifts visible.
How to check what you are actually paying: a quick checklist
Frequently asked questions
Why do card-processing fees vary between businesses?
Card-processing fees vary because the merchant service charge depends on card type, payment channel, card origin, pricing model, scheme fees and the acquirer’s margin. A cafe taking mostly domestic debit cards will usually pay less than an online merchant taking foreign-issued or commercial cards.
What is included in a merchant service charge?
A merchant service charge usually includes interchange, scheme fees, processing costs and the acquirer’s margin. Some contracts show these separately, but many small-business contracts bundle them into one blended percentage.
Why is my card-processing bill higher than the advertised rate?
Advertised rates often apply to a specific transaction type, such as domestic in-person consumer-card payments. Your actual effective rate can be higher if you accept commercial cards, foreign-issued cards, online payments, American Express or card-not-present transactions.
What is the difference between scheme fees and interchange fees?
Interchange is paid to the cardholder’s bank. Scheme fees are charged by card networks such as Visa and Mastercard. UK domestic consumer-card interchange is capped, but scheme fees are not capped in the same way.
Do commercial cards cost more to accept?
Yes. Commercial and business cards are not covered by the same UK consumer-card interchange caps, so they can cost more for merchants to accept.
Do online card payments cost more than in-person payments?
Usually, yes. Online and other card-not-present payments carry higher fraud and chargeback risk, so providers often price them above in-person transactions.
How can a business work out its effective card-processing rate?
Divide total card-processing fees by total card turnover for the same period. This gives the effective rate, which is often more useful than the advertised headline rate.
Related Business Expert data
- UK Card Processing Fee Benchmarks — full primary-source benchmark dataset.
- UK Payments Data Hub — all Business Expert payments research.
- UK Payments Statistics — wider UK payments market data.
- Payments methodology — how figures are sourced and refreshed.
- Card payment providers for UK businesses — provider comparison guide.
Sources and methodology
- PSR MR22/1.10 Final Report: Card scheme and processing fees, March 2025 — scheme fee increase quantification, ITC and Pricing Governance remedies, BRC cost citation.
- PSR MR22/2.8 / CP24/14 cross-border interchange consultation, December 2024 — proposed UK-EEA CNP price caps.
- UK Interchange Fee Regulation (Regulation (EU) 2015/751, UK retained law) — domestic interchange caps of 0.2% (debit) and 0.3% (credit).
- Visa UK Interchange Schedule (2024/25) — commercial and cross-border rates.
- Mastercard UK Interchange Schedule (2024/25) — commercial and cross-border rates.
- BRC Payments Survey 2024 — UK retailer card-processing cost totals (BRC-member retailers). The direct survey is not publicly downloadable; figures cited via PSR MR22/1.10 above.
- Provider rate cards Q1 2026: Revolut Business, Dojo, Tide, SumUp, Square UK, Stripe UK.
For methodology and refresh cadence, see the Payments methodology page.
Last updated: June 2026. Figures will be reviewed quarterly or when a primary source publishes revised data.
Media and research enquiries: research@businessexpert.co.uk.